¤ Yesterday In Gold & Silver

It was all gently down hill right from the open in New York at 6 p.m. on Wednesday evening. Then, at precisely 3 p.m. Hong Kong time---and one hour before the London open---the dollar index headed north---and the precious metals began to head south at an even faster rate. The final coup de grâce began a few minutes before the 8:20 a.m. EST Comex open when the HFT boyz showed up---and it was all over except the crying by 9:20 a.m. The gold price recovered a few dollars going into the London p.m. fix, but then traded basically flat for the remainder of the day.

The low and high ticks were recorded by the CME Group as $1,267.80 and $1,237.50 in the new front month, which is April.

JPMorgan Chase et al closed the gold price in New York at $1,243.10 spot, which was down $24.60 from Wednesday's close. Volume, net of the last of roll-overs out of February, was pretty heavy at 176,000 contracts.

Not surprisingly, silver got hit the hardest---and the price chart in most aspects, was almost the same as gold's---with the low coming at precisely the same moment as well. The rally off the low had a bit more life to it, but even that wasn't allowed to get far.

The high and low ticks were recorded as $19.73 and $18.97 in the March contract, an intraday move of almost 4%.

JPMorgan's new silver price at the end of the day was $19.135 spot, down 57.5 cents from Wednesday. Volume, net of February, was pretty chunky at 52,500 contracts.

The platinum and palladium charts look almost the same as their gold and silver brethren. The only real difference between them was that the lows in both metals came shortly after 11 a.m. EST, which was right after the London close. Here are the charts for them.

The dollar index closed late on Wednesday afternoon at 80.57---and then did nothing once trading began 45 minutes later as the Far East went to work on their Friday morning. And as I pointed out in the chart posted in The Wrap yesterday, at precisely 3 a.m. Hong Kong time---and an hour before the London open---the index began to head north with some authority. The rally ended at 81.12 just a few minutes before noon in New York, before giving back a small handful of basis points going into the close. The index closed at 81.05 which was up 48 points from Thursday's close.

Of course the big loses in both gold and silver happened in the one hour between 8:15 and 9:15 a.m. EST---and during that time period, the dollar index was trading flat. Here's yesterday's chart. Please note the precise beginning of the dollar rally. The metals really began to sell off at the point---and at exactly the same moment. I know, because I was watching the screen at the time.

This was a bear raid on the precious metals hidden behind the skirts of a manufactured rally in the dollar index.

The gold stocks gapped down---and barely did anything after that. The HUI closed down 2.49%. I was surprised it wasn't more.

It was pretty much the same chart pattern for the silver equities, although they did recover a bit off their lows. Surprisingly enough, Nick Laird's Intraday Silver Sentiment Index closed down only 1.61%.

The CME's Daily Delivery Report for Day One of the February delivery month wasn't quite what I was expecting. It showed that only 55 gold, but 181 silver contracts were posted for delivery on Monday from within the Comex-approved depositories. In gold, it was JPMorgan Chase with 53 contracts issued out of its client account---and there were seven different firms as stoppers. Nothing much to see here.

The big surprise was silver. Jefferies was the big short/issuer with 145 contracts---and in distant second was JPMorgan Chase with 35 contracts out of its in-house [proprietary] trading account. There were only two long/stoppers---and Canada's Bank of Nova Scotia was one of them. They gobbled up 176 contracts. The link to yesterday's Issuers and Stoppers Report is here.

For the second day in a row there was an addition to GLD. It was a smallish 19,282 troy ounces. And as of 9:24 p.m. EST yesterday evening, there were no reported changes SLV.

There was a tiny sales report from the U.S. Mint yesterday. They sold 29,000 silver eagles---and that was it.

Over at the Comex-approved depositories on Wednesday, it was the second day in a row where there was no reported in/out movement in gold.

There was more activity in silver, of course, as 600,360 troy ounces were reported shipped in---and 220,490 troy ounces were reported shipped out. The link to that activity is here.

Casey Research's own Jeff Clark always has an eye on the chart for the St. Louis Adjusted Monetary Base over at FRED. Jeff send me the chart below with the comment that it had jumped 4.3% in just two weeks.

Yesterday I posted the historic derivatives data for gold from the quarterly reports from the OCC. Today I have the same reports, except it's for the "White Metals". The OCC doesn't break silver, platinum and palladium into separate categories, but lumps them all in together, so there is no tonnage chart.

The first chart shows the derivatives positions of all U.S. banks and, like the same chart for gold yesterday, the positions held by some of these banks over the years were so tiny, that they are literally invisible.

But it's safe to say that the lion's share of the white metal derivatives held by the U.S. banks are in silver.

Once all the smaller banks are lumped into the "Other" category, the chart looks like the one below. And, like in gold, the vast majority of the derivatives in the "Other" category are also held by HSBC USA.

Of the 6,096 registered banks in the U.S.A., 99.95% of all precious metal derivatives are held by these three banks.

And as I've been saying for years, the price management scheme in the precious metals is 100% "Made in the U.S.A."---with a little international flavour in silver from Canada's Scotiabank.

And before leaving this subject, I extend my profuse thanks to Nick Laird over at www.sharelynx.com for his excellent work in providing us with these charts.

Despite my best editing efforts, I have another big pile of stories for you today

¤ Critical Reads

Amazon.com Inc.'s shares fell almost 10 percent a few minutes past 4 p.m., after the company dropped some disappointing earnings news. The title of the company's news release is cheerily optimistic: "Amazon.com Announces Fourth Quarter Sales up 20% to $25.59 Billion." And its operating income actually beat estimates -- $510 million, compared with $489.9 million. But fourth-quarter sales of $25.6 billion were considerably below estimates of $26.08 billion, and earnings per share were 51 cents instead of the 69 cents that analysts had been expecting.

That's not just disappointing for Amazon; it's also not great news for the U.S. economy. When retail foot traffic and sales were disappointing in December, the standard explanation was that people must be moving their purchases online. Obviously, they weren't -- at least, not nearly as much as analysts expected. Given how dominant Amazon is in e-commerce, this should cause most of us to revise our expectations of fourth-quarter retail sales, as well as growth in gross domestic product. And not in a good direction.

Well, dear reader, when the likes of Amazon aren't doing well, you know that entire retail sector is in a world of hurt---a fact that reader 'David in California'---who is in the retail business himself---has been going on about for the last year or so. The above two paragraphs are all there is to this Bloomberg story. It was posted on their website mid-afternoon yesterday Denver time---and today's first news item is courtesy of reader Ken Hurt.

Financial markets and their cheering section are trumpeting the U.S. economic recovery, but it may be a false dawn in America, according to Stephen Roach, a Yale University economist and former Morgan Stanley Asia chairman.

Roach said the good news is that GDP appeared to grow in the back half of 2013, the official jobless rate is down and the Federal Reserve feels confident enough to taper back on its mountain of monetary stimulus.

"But my advice is to keep the champagne on ice," he said in an opinion piece for Project Syndicate. "Two quarters of strengthening GDP hardly indicates a breakout from anemic recovery. The same thing has happened twice since the end of the Great Recession in mid-2009. . . . In both cases, the uptick proved to be short-lived."

This news item was posted on the moneynews.com Internet site early yesterday morning EST---and I thank West Virginia reader Elliot Simon for sharing it with us.

In a mere 140 seconds, Jim Grant explains to an almost stunned into silence Rick Santelli how we all "live in a valuation hall of mirrors" as the Fed manipulates everything. Thanks to it's "fingers and thumbs on the scales of finance," Grant continues, the Fed "insists on saving us from 'everyday low prices'" - what they call deflation - and by doing so it manufactures "redundant credit" which "does mischief" in and out of markets. Grant, ominously concludes, "there is no suspense as to how [this will] end... [it will] end badly."

This must watch 2:23 minute CNBC video is embedded in this short commentary that was posted on the Zero Hedge website yesterday evening EST---and I thank reader M.A. for sending it our way.

Federal Reserve Chairman Ben Bernanke, who retires this week as the world’s most powerful central banker, cannot be trusted.

Neither can Janet Yellen, who will succeed him this weekend at the Federal Reserve.

And neither can Mark Carney, governor of the Bank of England; Mario Draghi, president of the European Central Bank, or any of their counterparts at the central banks of Turkey, Argentina, Ukraine and so on.

I am not trying to aim a valedictory insult at Bernanke or his central banking colleagues. On the contrary, I am drawing attention to the skill and determination required by central bankers to perform one of the world’s most demanding and important jobs. For just as James Bond has a “License to Kill” in the Ian Fleming books, so central bankers possess a “License to Lie” — or, putting it more diplomatically and politely, to make promises about the future that cannot be honored and often turn to be false.

This right-on-the-money op-ed piece showed up on the Reuters website sometime yesterday---and I extracted it from a GATA release.

“In November 1910, some powerful U.S. bankers joined by the influential Paul Warburg had a meeting on Jekyll Island that would determine the destiny of the world financial system and the world economy for over 100 years. This infamous meeting led to the creation of the Federal Reserve System in the US on December 23, 1913.

The Fed was created by private bankers for the benefit of private bankers and today, 100 years later, they have been more successful than they could ever have imagined in 1913.

So for exactly 100 years now, the Fed and other central bankers have totally destroyed all major world currencies and left the world with debts that cannot and will not be repaid with normal money. And whilst achieving this unprecedented wealth creation for the top level of financiers, they have in the last 15 years also managed to enrich almost every single individual who works in Wall Street in New York or in the City in London. In 2008 the financial system almost collapsed had it not been for an injection of printed money, debt and guarantees by governments and central banks to the level of $25 trillion. Banks like Goldman Sachs, JP Morgan and Morgan Stanley would not have survived without this massive liquidity infusion.

This short essay was posted on the goldswitzerland.com Internet site yesterday---and it's definitely worth reading.

Russia's Lukoil has announced an agreement with Mexico's state-run oil company Pemex for exploration, extraction and cooperation on environmental best practices.

The cooperation memorandum was agreed on the sidelines of the World Economic Forum in Davos, Switzerland, and represents the first foreign partnership to be forged since Mexico moved to reform its energy sector in December and to Pemex’s 75-year state monopoly over exploration and production.

Since 1938, Pemex has controlled the entire hydrocarbons production chain in Mexico. In the past decade, however, falling investment and a sharp drop in production from 3.8 million barrels per day in 2004 to 2.6 million barrels in 2013, has forced a government rethink that will open doors to international oil companies.

This interesting commentary was posted on the oilprice.com Internet site on Tuesday---and it's courtesy of reader 'David in California'.

“Closed due to the peso devaluation”. In the past few days, many Argentinean stores have been putting up signs with this message. Following a 14% drop in the national currency’s value, Argentina’s retail sector is once again in crisis mode. Our Observer works at a motorcycle dealership, and her daily work in the store has become rather challenging.

In order to curb the disastrous consequences of the peso’s decline, the government has allowed Argentineans who earn more than 7,200 pesos per month (about 660 euros) to receive 20% of their salary in dollars, with a limit of $2,000 per month. Stores are now displaying certain prices in dollar amounts, because the dollar is considered to be a safe haven currency, while Argentina’s currency fluctuates on a daily basis.

The retail sector is completely paralysed! The mopeds that we sell are usually purchased from an Argentinean factory, but they’ve stopped selling since the announcement regarding the devaluation. What with the value of the peso changing every day, producers no longer know which margin to apply. We had taken precautions by stockpiling a bit, because we felt that the country’s economic situation was unstable, but how can we know what price we should charge? So we aren’t selling any bikes right now.

We are supposed to display prices in pesos because we are selling domestically-produced products. [Stores that sell imported products are allowed to display dollar prices], Even if we wanted to set our prices by referring to the equivalent price in dollars, it’s a real head-scratcher, because three rates are applied. For instance, currently, the most recent official rate is 8 pesos per dollar, but if you buy online, an additional sum is levied, which means it’s 10.8 pesos per dollar. In contrast, on the black market, a dollar is worth 12 pesos, which we call “the blue dollar”.

This very interesting news item showed up on the france24.com Internet site on Wednesday---and it's the first offering of the day from Roy Stephens.

Denmark’s government mustered enough votes to let Goldman Sachs Group Inc. buy a stake in state-owned Dong Energy A/S after resistance to the deal prompted one of the ruling coalition’s three parties to quit.

The government of Prime Minister Helle Thorning-Schmidt won majority lawmaker backing for the deal even after the Socialist People’s Party left the coalition today.

Parliament’s finance committee agreed to let the Wall Street bank pay 8 billion kroner ($1.5 billion) for an 18 percent stake in Dong. A Megafon poll conducted by TV2 showed 68 percent of Danes are against Goldman holding the stake and thousands of protesters gathered outside the parliament last night to voice their anger over the deal.

It's nice to see that the "vampire squid" has a well recognized reputation for screwing anyone and everyone regardless of nationality. This Bloomberg story was posted on their Internet site early yesterday morning MST---and it's the first offering of the day from Manitoba reader Ulrike Marx.

When your manufacturing industry unions kidnap their business leaders, taxes reach extremes of duress, industrial production limps lower and unemployment hits record highs; it is hardly surprising that the world is a little nervous of piling its hard-printed cash into your country. But in the case of France, data reported by the UN shows the biggest collapse in foreign direct investment ever. Figaro reports that FDI fell to EUR 5.7 billion, a drop of over 75% year-over-year...and the lowest since 1987. Ironically, Spain's FDI rose 37% and Germany's quadrupled... Is France an Emerging Market now?

That's all there is to this very brief Zero Hedge piece posted on their website yesterday afternoon EST. But the embedded chart is worth the trip. My thanks go out to Ulrike Marx for her second story in a row.

Germany's constitutional court is expected to rule this spring on the legality of the European Central Bank's bond purchases, a scheme that has eased the eurozone crisis by calming markets.

Udo Di Fabio, who served as constitutional judge between 1999-2011, told an audience at the Berlin-based Stiftung fur Familienunterhmen on Wednesday (29 January) that the court is "deliberating at the moment if the ECB can buy bonds at all."

According to EU laws, the ECB is prohibited from direct government funding, meaning direct bond purchases when a national government tries to sell debt on the markets.

But in the past years, the eurozone bank has engaged in "secondary bond purchases" which are bought from investors and considered an investment by the ECB.

This article, filed from Berlin, showed up on the euobserver.com Internet site late in the Europe lunch hour yesterday---and it's the second offering of the day from Roy Stephens.

Ukrainian President Viktor Yanukovich went on sick leave on Thursday after a bruising session of parliament, leaving a political vacuum in a country threatened with bankruptcy and destabilized by anti-government protests.

The 63-year-old president appears increasingly isolated in a crisis born of a tug-of-war between the West and Ukraine's former Soviet overlord Russia. A former president said this week the violence between demonstrators and police had brought the country to the brink of civil war.

Shortly after his office announced he had developed a high temperature and acute respiratory ailment, Yanukovich defended his record in handling the crisis and accused the opposition, which is demanding his resignation, of provoking the unrest.

This longish Reuters piece, filed from Kiev, was posted on their Internet site early yesterday afternoon EST---and it's another contribution to today's column from Roy Stephens.

The Obama administration is preparing financial sanctions that could be imposed on Ukrainian officials and protest leaders if violence escalates in the political crisis gripping Ukraine, congressional aides said on Wednesday.

Congressional aides, who asked not to be identified by name because of the sensitive subject, said they had discussed the sanction preparations with administration officials.

They said final details of the package have not been worked out, but it could be put in place quickly against government officials - or leaders of the protest movement - in case of widespread violence.

Six people have been killed in Kiev and other Ukrainian cities in protests that erupted more than two months ago after President Viktor Yanukovich walked away from a treaty with the European Union under pressure from Russia.

This Reuters story was filed from Washington on Wednesday evening---and it's the second contribution from Elliot Simon.

Italy and Switzerland intend to make progress by May in resolving a dispute over Italian tax evaders who hid money in Swiss bank accounts, Economy Minister Fabrizio Saccomanni said.

“We have told our delegations to step up efforts in order to reach a comprehensive deal in due time,” he said at a joint press conference with his Swiss counterpart in Bern today. The two countries should be able to agree on the “timing and ways of the data exchange” by May when Italian President Giorgio Napolitano visits Switzerland, he said.

The Alpine nation is trying shake off its reputation as a tax haven after amassing $2.2 trillion of assets from wealthy clients living outside the country. Switzerland has entered into withholding tax agreements -- which preserve account secrecy while refunding tax revenue -- with the U.K. and Austria, and since 2012 has been in talks with Italy about a similar arrangement.

This Bloomberg article, co-filed from Bern and Rome, was posted on their Internet site early yesterday morning MST---and it's courtesy of Ulrike Marx.

Half the world economy is one accident away from a deflation trap. The International Monetary Fund says the probability may now be as high as 20pc.

It is a remarkable state of affairs that the G2 monetary superpowers - the US and China - should both be tightening into such a 20pc risk, though no doubt they have concluded that asset bubbles are becoming an even bigger danger.

"We need to be extremely vigilant," said the IMF's Christine Lagarde in Davos. "The deflation risk is what would occur if there was a shock to those economies now at low inflation rates, way below target. I don't think anyone can dispute that in the eurozone, inflation is way below target."

It is not hard to imagine what that shock might be. It is already before us as Turkey, India and South Africa all slam on the brakes, forced to defend their currencies as global liquidity drains away.

This commentary by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site late yesterday evening GMT---and it's a must read. My thanks go out to Roy Stephens.

Russia’s central bank pledged “unlimited” intervention to maintain the strength of the ruble on Thursday as emerging markets continued to come under pressure from the Federal Reserve’s withdrawal of stimulus.

Capital flight from emerging markets continued on Thursday after the US Federal Reserve confirmed fears it would trim another $10bn (£6bn) off its massive asset purchase programme.

A closely-watched survey of Chinese manufacturers, showing the sector contracted for the first time in six months in January also exacerbated jitters in the market.

This short piece was posted on The Telegraph's website early afternoon GMT---and it's the second contribution in a row from Roy Stephens.

Investors are pulling money from exchange-traded funds that track emerging markets at the fastest rate on record, as China’s slowing growth and cuts to central-bank stimulus sink currencies from Turkey to Brazil.

More than $7 billion flowed from ETFs investing in developing-nation assets in January, the most since the securities were created, data compiled by Bloomberg show. The iShares MSCI Emerging Markets ETF has seen its assets shrink by 11 percent, while the Vanguard FTSE Emerging Markets ETF is poised for the biggest monthly redemption since the fund was started in 2005. The WisdomTree Emerging Markets Local Debt Fund is on track for an eighth straight month of withdrawals.

Investors accelerated redemptions after data showed Chinese manufacturing contracted and Argentina’s unexpected devaluation of its peso dented confidence in Latin America. Surprise rate increases by central banks in Turkey and South Africa failed to boost their currencies, while the U.S. Federal Reserve opted to press on with reductions to its monetary stimulus.

This Bloomberg article, filed from New York, was posted on their Internet site yesterday morning MST---and it's courtesy of Elliot Simon.

Turkey ruled out capital controls on Thursday as it battles to defend the lira and tame inflation, leaving investors guessing as to what an "out of the ordinary" economic package touted by Prime Minister Tayyip Erdogan might involve.

Finance Minister Mehmet Simsek said there was no question of restrictions on capital movements after an emergency interest rate hike late on Tuesday failed to lift the lira currency substantially off record lows.

Erdogan, battling a corruption investigation shaking his government months ahead of elections, was quoted late on Wednesday as saying work on "a Plan B or a Plan C" for the economy may be announced in the coming days or weeks.

This Reuters news item, filed from Ankara, was posted on their website yesterday morning EST---and once again I thank Roy Stephens for bringing it to our attention.

Piles of unsold coal line rural roads in north-central China. Some iron ore mines near Beijing are operating at a fraction of capacity. Chinese farm products are even increasingly scorned by the Chinese consumer.

While China remains nearly self-sufficient in all these categories, it is importing more from other emerging markets. Economists and investors around the world have been fretting in recent days about the effects on smaller emerging markets if China’s economic slowdown worsens. Those concerns have driven down share prices and currencies from Jakarta to Istanbul to Buenos Aires, although emerging markets staged a partial recovery on Wednesday. They helped to prod the central banks of Turkey and India to raise benchmark interest rates unexpectedly on Tuesday.

Yet the most vulnerable producers these days may not be the coal mines in Indonesia, palm oil plantations in Malaysia or soybean farms in Brazil, but the farms and particularly the mines in China itself.

China’s role as the largest buyer of a long list of commodities, from iron ore to palm oil, means that emerging markets are heavily exposed to any economic slowdown. But their ability to capture ever-larger shares of the Chinese market at the expense of China’s commodity producers has limited at least somewhat the exposure of emerging markets.

This very interesting story, filed from Hong Kong, was posted on The New York Times website on Wednesday---and it's the final contribution of the day from Roy Stephens.

Chinese Ambassador Liu Jieyi said the Japanese prime minister's recent visit to the controversial Yasukuni shrine had "closed the door to dialogue".

South Korea's envoy, meanwhile, accused Japan of having a "distorted view" of history.

Japan said raising these issues at the U.N. did not help to reduce tensions.

The exchanges took place on Wednesday at a U.N. Security Council open debate on lessons to be learned from war.

This news item was posted on the bbc.co.uk Internet site on Wednesday---and it's certainly falls into the must read category for all serious students of the New Great Game. It's courtesy of South African reader B.V.

As the supply of physical gold on hand diminished, increasingly recourse was taken to selling gold short in the paper futures market. We illustrated a recent episode in our article. Below we illustrate the uncovered short-selling that took the gold price down today (January 30, 2014).

When the Comex trading floor opened January 30 at 8:20AM NY time, the price of gold inexplicably plunged $17 over the next 30 minutes. The price plunge was triggered when sell orders flooded the Comex trading floor. Over the course of the previous 23 hours of trading, an average of 202 gold contracts per minute had traded. But starting at the 8:20AM Comex, there were four 1-minute windows of trading---and here’s what happened...

Over those four minutes of trading, an average of 3,424 contracts per minute traded, or 17 times the average per minute volume of the previous 23 hours, including yesterday’s Comex trading session.

This must read commentary by Paul and Dave Kranzler was posted on Paul's website yesterday. I've changed the title in order to reflect the predominate topic in this article, as there's no mention of it in the original title. I thank reader David Caron for being the first person through the door with this article yesterday.

South Africa's AMCU union rejected a 9 percent wage offer on Thursday from leading platinum producers, prolonging a week of industrial action that has combined with a severe emerging market sell-off to push the rand to five-year lows.

The strike has hit around 40 percent of the global supply of platinum, used in catalytic converters in cars, and magnified concerns about the trade deficit in Africa's largest economy due to its impact on a big source of foreign exchange.

Thousands of miners at a football stadium near Lonmin's Marikana mine - scene of the police killing of 34 strikers in 2012 - reacted with boos and jeers when told about the offer tabled after four days of government-brokered talks.

The union had been seeking a doubling of wages to 12,500 rand ($1,100) a month and its members at rival producers Anglo American Platinum and Impala Platinum reacted with similar disdain.

This Reuters story, filed from Rustenburg, found a home over at the mineweb.com Internet site yesterday---and it's worth skimming. My thanks, once again, go out to Ulrike Marx.

A South African strike that’s crippling output at the world’s three-biggest platinum producers may spread at Anglo American Platinum Ltd. as a second union plans to walk out of its refineries and smelters.

The National Union of Metalworkers of South Africa will tomorrow issue a notice to down tools, Stephen Nhlapo, Numsa’s head of basic metals and energy, said today by phone. The union demands pay increases of as much as 10 percent and a 2,500-rand ($224) raise in the lowest-paid workers’ basic wage, he said.

“We’re just looking at some legalities and adding the final touches” to the notice, Nhlapo said.

This Bloomberg story ended up on the mineweb.com Internet site as well. I found there in the wee hours of this morning EST---and it's worth skimming.

Gold jewellers in Dubai have reported the strongest gold sales in seven years, with over four million shoppers crowding the retail and jewellery outlets at the Dubai Shopping Festival. Though Indian expats and Indian tourists have taken the lead in the gold rush this year, diamond jewellery counters are also registering an increased presence of buyers from China and from European tourists.

Tomy Joseph, general manager of the Dubai Gold and Jewellery Group told Gulf News that sales had jumped by about 35% as compared to last year’s sales, in the first eleven days of the festival period.

He added that an average 250 kilograms of gold was sold daily in participating outlets in Dubai this year in the first three weekdays, as compared to 150 to 175 kilograms daily gold sales last year, during the same period. Interestingly, not all participating outlets have reported their sales as yet, indicating that the numbers could be much higher.

This must read story, filed from Mumbai, was posted on the mineweb.com Internet site yesterday---and it's the final offering of the day from Ulrike Marx, for which I thank her.

¤ The Funnies

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¤ The Wrap

You seem to have missed the point that the price (of gold) is rigged more than a 19th century Tea Clipper. - a quote from a Bloomberg blog

Well, I suppose I should have expected nothing less from JPMorgan et al on the last day that all traders had to roll over out of the February contract. We should be used to these engineered bear raids when they occur, but we never are. And as I said further up in today's missive---"This was a bear raid on the precious metals hidden behind the skirts of a manufactured rally in the dollar index."

"Da Boyz" can do what they like, as there is no one to stop them---and the precious metal miners just pretend that it's not happening and are just hoping that will all end soon so they don't have to pretend to shareholders that everything is just fine. They have become quite adept at ignoring the screams from their real owners, which is us.

If there was anything positive to be gleaned from yesterday's price action, it was the fact that neither the gold or silver equities got smoked to the downside. I was expecting much worse in gold---and the fact that the silver equities did as well as they did, was a surprise. I'm not sure what it means, if anything.

Today, at 3:30 p.m. EST, we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, January 28. I'm not sure what to expect in gold, as we had that big "up" day last Wednesday---and just eye-balling the silver chart, I'd guess that we'll see some improvement in the Commercial net short position in silver. However, I'll be ready for anything that the report shows.

Of course the results of yesterday's bear raid won't be know until next Friday's COT Report---and literally anything can happen between now and then, but it's already a given that the report we get today will already be "yesterday's news" the moment it's released, as the sell-off yesterday will have changed everything.

Here's the six-month chart in silver. As you can see, the brief plunge below the $19 price mark puts as almost back at record lows, so silver from a COT perspective looks pretty washed out.

As Ted pointed out on the phone yesterday, the gold price touched, but did not penetrate, the 50-day moving average to the downside---and this may be a target for JPMorgan et al either today, or in the very near future. Of course if they take down gold, they'll take down silver as well, but the technical fund cupboard is pretty bare at these price levels, unless they can convince these traders to go even more short than they already are.

This is speculation on my part, but I'm just thinking out loud at the moment. Here's the six-month gold chart.

Very little happened price wise in any of the four precious metals during the Far East trading day on their Friday---and not much is going on now that London has been open a bit over 30 minutes. Volume is nonexistent in both gold and silver, so the HFT boyz are obviously nowhere in sight---and the dollar index is trading ruler flat as well.

Today is not only Friday, but it's the last trading day of the month---and I'm not sure what to expect during the New York session today. JPMorgan et al were there in full force yesterday morning---and it remains to be see if they show up again today.

And as I send this off to Stowe in Vermont at 5:15 a.m. EST, the precious metal prices still continue to trade sideways. Volumes are higher, or course, but not by much---and the dollar index is up 10 basis points.

That's it for another day. I hope you enjoy your weekend---or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.